Advisory Agreement - Michael Jordan, Falk Associates Management Enterprises and SportsLine USA Inc.
ADVISORY AGREEMENT
This Agreement is entered into as of June 20, 1997 (the "EFFECTIVE DATE") by and
among MICHAEL JORDAN ("JORDAN"), FALK ASSOCIATES MANAGEMENT ENTERPRISES ("FAME")
and SPORTSLINE USA, INC., A DELAWARE CORPORATION ("SPORTSLINE") and provides as
follows:
SportsLine desires to contract with Jordan for certain services and to obtain
from Jordan certain content for distribution through its sports-oriented online
service currently located at universal resource locator
"http://cbs.sportsline.com" (the "SPORTSLINE SERVICE"), and Jordan is willing to
render such services, on the terms and conditions set forth herein. For and in
consideration of the mutual terms and conditions set forth in this Agreement,
the receipt and adequacy of which is hereby acknowledged, the parties agree as
follows:
1. TERM. The term of this Agreement shall be as set forth in EXHIBIT "A" (the
"TERM").
2. SERVICES, RIGHTS & CONTENT. SportsLine end Jordan agreeto create a
designated area of the SportsLine Service as the exclusive Jordan-authorized
web site that features content to be provided by or on behalf of Jordan
(hereinafter, the "JORDAN WEB SITE"). The Jordan Web Site will be hosted and
operated by SportsLine on SportsLine's servers at a World Wide Web address
(the "JORDAN URL") mutually agreed upon by the parties as may be adopted
from time to time (tentatively, "michaeljordan.com"), and shall contain
prominent links to the SportsLine Service. As more fully set forth herein,
Jordan agrees to fully provide the content and perform the services outlined
herein including but not limited to the services and content set forth on
EXHIBIT "B."
3. EXCLUSIVITY. During the Term, and subject to any rights granted to the NBA
pursuant to the NBA's Group Licensing Agreement (Jordan and FAME hereby
acknowledge that, as of the Effective Date, Jordan has opted out of and is
not currently subject to the NBA Group Licensing Agreement) or any other
rights granted to the NBA pursuant to Jordan's contract with the Chicago
Bulls, Jordan shall not be employed by, act as a consultant to, provide any
content, chat sessions, information, products (including but not limited to
merchandise and memorabilia) or services to, or otherwise render services of
any nature for or on behalf of, any internet or World Wide Web (including
but not limited to ESPN SportsZone, CNN/Si, Sporting News, NBC Sports,
FoxSports, etc.), commercial online (including but not limited to Microsoft
Network, America Online, CompuServe, etc.), electronic or similar service
(regardless of whether such service is accessible through the Internet or
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otherwise). In addition, as more fully set forth herein, Jordan hereby
grants SportsLine an exclusive, world-wide license both online and off-
line, to create the official Jordan Fan Clubs (as defined herein); however,
that the foregoing shall not prohibit any of the sponsors listed on EXHIBIT
"D" attached hereto (each, a "JORDAN ENDORSEMENT COMPANY") from distributing
information, advertising, or product samples to Jordan fans so long as such
activities are not reasonably construed to be in the nature of Fan Club
activities in order to avoid confusion in the marketplace and to avoid
adversely affecting the effectiveness of the Jordan Fan Clubs. Jordan
understands and agrees that SportsLine shall not be prevented nor barred
from retaining other persons or entities to provide services of the same
nature or similar nature as those described herein or of any nature
whatsoever. SportsLine acknowledges that the Jordan Endorsement Companies,
WorldCom (in particular, with respect to Internet access services) and the
NBA may have certain marketing rights that may extend to the Internet and
which rights shall not be considered a breach of this Agreement; provided,
however, under no circumstances may those rights include the creation of a
Web site containing and content similar to the Jordan Information or have
the same look and feel of the Jordan Web Site nor any interviews, chat
sessions, or other services as provided herein.
4. PROMOTION. Jordan shall use his best efforts to (i) secure from his
corporate sponsors and endorsers promotion of the Jordan Web Site in all
print, direct mail, radio and television advertisements, infomercials, and
other traditional, electronic and online marketing and promotional vehicles
used by such sponsors and endorsers to promote Jordan, including arranging
to have the Jordan URL displayed on hanging tags on Jordan's endorsers' or
licensees' signature line of apparel and/or equipment, and any books and
documentaries; and (ii) mention the Jordan Web Site and Jordan URL in all
appropriate interviews and appearances of Jordan (the "PROMOTIONAL
EFFORTS"). The Promotional Efforts shall prominently feature the lordan URL
followed by the promotional statement "a SportsLine USA Powered Web Site" or
other similar language designated by SportsLine, and display the Jordan URL,
as may be adopted from time to time. SportsLine will actively promote the
Jordan Web Site both within the SportsLine service and on other Web sites
consistent with SportsLine's promotion of its other superstar Web Sites.
5. SPONSORSHIP/ENDORSEMENT CONFLICTS.
(a) SportsLine agrees and acknowledges that FAME and Jordan shall have the
right to approve, in their absolute discretion, any third-
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party corporate sponsorships for the Jordan Web Site, and that any use
of Jordan's name and likeness in connection with any third-party
corporation or sponsor is subject to prior written approval by Jordan
and FAME, based upon Jordan's pre-existing Agreements with Jordan
Endorsement Companies. In the event FAME or Jordan disapproves any
third-party corporate sponsorship, FAME or Jordan, as applicable, shall
provide SportsLine with FAME's and/or Jordan's reasons in writing.
However, SportsLine acknowledges that there will be certain situations
where, due to pre-existing third party agreements or in Jordan's sole
discretion, Jordan cannot or will not grant approval to certain
products, sponsorships and/or advertising in connection with the Jordan
Web Site. Further, SportsLine agrees that it will not under any
circumstances negotiate with, enter into any Agreement with or otherwise
consult with any of the Jordan Endorsement Company Major Direct
Competitors listed on Exhibit "E" attached hereto to advertise, promote
or market the Jordan Web Site. SportsLine agrees to work with Jordan and
FAME to ensure that there shall be no ambush marketing by other than
Jordan Endorsement Company third-party corporate partners in connection
with the Jordan Web Site;
(b) SportsLine acknowledges that Jordan has entered into and will enter into
certain third party agreements with Jordan Endorsement Companies
relating to the food and beverage, sporting goods, telecommunications
and apparel industries (collectively the "JORDAN THIRD PARTY
AGREEMENTS"). Notwithstanding any provision contained in this Agreement
to the contrary, SportsLine agrees that it will not take any action nor
fail to take any action, as applicable under the circumstances, in
connection with marketing, promoting, advertising and operating the
Jordan Web Site and marketing, promoting, advertising and selling Jordan
Merchandise which would violate or otherwise interfere with the terms
and conditions of any existing or any future Jordan Third Party
Agreement (a "MARKETING CONFLICT"), but only to the extent that
SportsLine has been given prior written full disclosure of the material
terms and conditions that create any such Marketing Conflict. Jordan and
SportsLine will mutually agree upon procedures for the disclosure by
Jordan to SportsLine of such information as is necessary, for SportsLine
to comply with the foregoing. SportsLine will, as soon as
technologically and commercially feasible following SportsLine's receipt
of notice of a Marketing Conflict, take or refrain from taking such
action, as applicable under the circumstances, so as to otherwise comply
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with the terms and conditions of the Jordan Third Party Agreements;
provided, however, that SportsLine shall have a reasonable period of
time within which to deplete any existing inventory or inventory to
which SportsLine is contractually obligated as of the date of receipt of
notice of any Marketing Conflict. To the extent that SportsLine violates
a restriction in a Jordan Third Party Agreement because SportsLine did
not have written notice of such restriction, SportsLine shall not be
deemed in breach of this Agreement to the extent that it promptly comes
into compliance with such restriction, subject to SportsLine's right to
deplete inventory as describe above, following written notice of such
violation and such other disclosures as required by this section.
SportsLine shall be solely responsible for contracting with the
appropriate parties having rights under any Jordan Third Party Agreement
in the event that SportsLine desires to purchase Jordan Merchandise from
such third party, and Jordan shall have no obligations in connection
therewith except as otherwise expressly provided herein.
6. CONSIDERATION. In full consideration for Jordan's services under this
Agreement, SportsLine will pay Jordan pursuant to the terms outlined in
EXHIBIT "C."
7. GRANT OF LICENSE. Jordan hereby grants to SportsLine the following
licenses:
a) CONTENT. Subject to any rights granted to the NBA pursuant to the Group
Licensing Agreement and any rights granted by Jordan to Jordan
Endorsement Companies Jordan grants to SportsLine an exclusive worldwide
license:
i) To the Jordan URL;
ii) To use, copy, display (publicly or privately), perform (publicly
or privately), distribute or otherwise make available through the
Jordan Web Site and the SportsLine Service the name, initials,
likeness, logos, approved photographs, statements of approval,
preference and endorsement, biographical information of Jordan
(the "JORDAN ENDORSEMENT") and the Jordan Information (as defined
herein):
A) In connection with the development, advertisement, promotion
and distribution of the SportsLine Service
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and the Jordan Web Site (including, without limitation,
information and text-oriented services, chatrooms, interviews,
contests, interactive games on the Internet only, statistics,
and sports feature texts).
B) In SportsLine's letterhead.
C) In connection with any demonstration, promotion, or
advertisement of or as otherwise reasonably necessary to
promote the SportsLine Service or the Jordan Web Site in any
medium.
iii) To enter Jordan Information into SportsLine's computer database.
iv) To store, process, retrieve and transmit the same on the
SportsLine Service and the Jordan Web Site.
v) To reproduce any Jordan Endorsement or Jordan Information or any
part of it for advertising, promotion and publicity of SportsLine.
SportsLine's rights hereunder shall include, but not be limited to,
SportsLine's right, in its sole discretion, to offer subscribers the option
of printing and downloading Jordan Information or any portion thereof as a
function of the SportsLine Service generally.
b) MERCHANDISE. In addition, subject to any rights granted to any third
parties by Jordan, Jordan grants to SportsLine the world- wide license
to sell Jordan memorabilia such as autographed uniforms, basketballs,
apparel, equipment, posters and any other sports memorabilia online
("JORDAN MERCHANDISE") through the Jordan Web Site; provided that, to
the extent that Jordan has a pre-existing contractual obligation with
The Upper Deck Company which conflicts with the rights and license
granted pursuant to the foregoing provision, Jordan agrees to use his
best efforts to facilitate a relationship between SportsLine and The
Upper Deck Company. SportsLine agrees that any Jordan-autographed
sports apparel, shoes, or sports equipment that SportsLine desires to
sell in connection with The Upper Deck Company must be manufactured by
Nike, Inc., and Wilson Sporting Goods, Inc., respectively, or any other
third party with which Jordan has a contract.
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c) RESERVATION OF RIGHTS. All right, title and interest in all Jordan
Information are and shall remain Jordan's, subject to the rights and
licenses granted to SportsLine herein.
d) ADDITIONAL RESTRICTIONS. SportsLine shall not use the Jordan Endorsement
in a manner which implies an endorsement of any Web site and/or
SportsLine sponsor or any other non-Jordan Corporate Partner, or an
endorsement of any computer hardware and software, video games, cellular
phones and accessories, telephone debit and travel cards, or any
telephone and telecommunications services without Jordan's prior written
approval.
8. APPROVALS.
a) SportsLine agrees to submit to Jordan and FAME for their approval, a
copy of ail advertising and/or promotional materials utilizing Jordan's
likeness at least fourteen (14) calendar days prior to their release to
the general public. SportsLine further agrees that such advertising and
promotional materials shall not be released without prior written
approval of Jordan and FAME. Jordan and FAME agree, however, that they
shall not unreasonably withhold or delay their approval of such
materials and that in absence of disapproval, within ten (10) calendar
days of receipt thereof, such advertising and promotional materials
shall be deemed approved. Notwithstanding the foregoing, SportsLine
shall have the right to use screen shots and captions from the Jordan
Web Site and any previously approved content from the Jordan Web Site
for any uses otherwise permitted hereunder; provided that there are no
material changes to such screen shots, captions and content as approved.
(b) From time to time during the term of this Agreement, SportsLine will
submit merchandise to Jordan and FAME, for their approval, which
SportsLine proposes to market, promote, advertise and sell through the
Jordan Web Site. Jordan and FAME may, in their sole discretion, approve
or disapprove any or all such submitted merchandise to be sold by
SportsLine on the Jordan Web Site.
(c) To the extent known by Jordan and FAME, Jordan and FAME shall disclose
to SportsLine appropriate contacts with third party sources of Jordan
Merchandise for purchase by or sourcing to or on behalf of SportsLine
for SportsLine's use of the Jordan Endorsement as permitted under this
Agreement; provided,
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however, that Jordan and FAME shall have no obligation to coordinate or
facilitate the sale of any such approved merchandise from a third party
vendor to SportsLine as it shall be SportsLine's sole responsibility to
obtain such approved Jordan Merchandise from a third party vendor.
Jordan and FAME shall assist SportsLine in good faith in obtaining
favorable terms with respect to the sale of such Jordan Merchandise.
(d) To the extent SportsLine creates unique Jordan Merchandise, SportsLine
agrees to provide to Jordan and FAME a combined total of two (2)
representative copies or samples (i.e., one each to Jordan and FAME) of
all such proposed Jordan Merchandise together with a description of the
intended use of the merchandise to Jordan and FAME without cost to
Jordan and FAME for written approval prior to SportsLine using the same.
Jordan and FAME shall approve or disapprove any merchandise submitted by
SportsLine for approval within ten (10) business days of their receipt
by Jordan and FAME. If Jordan or FAME do not approve or disapprove
SportsLine's submission within such ten (10) day period, SportsLine will
provide written notice to Jordan and FAME of such delay and Jordan and
FAME agrees that any such proposed merchandise will be deemed approved
if SportsLine's submission is not responded to within five (5) business
days following receipt of such written notice. The copies and samples
submitted by SportsLine to Jordan and FAME under this Section 8(d) may
be retained by Jordan and FAME at their option. SportsLine will
thereafter submit to Jordan-and FAME, without cost to Jordan or FAME,
one (1) unit of such finished Jordan Merchandise, as approved, upon
commencement of production of such Jordan Merchandise.
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9. RESPONSIBILITIES OF JORDAN AS TO CONTENT.
a) JORDAN INFORMATION. For purposes of this Agreement, the term "JORDAN
INFORMATION" means all information created and/or delivered by Jordan to
SportsLine for inclusion in the SportsLine Service or the Jordan Web
Site including but not limited to (i) any trademark, service mark, trade
name or logo, whether or not registered, included in such information,
provided that any such trademark, service mark, trade name or logo must
be approved in advance by Jordan and FAME (ii) the content to be
provided as set forth on EXHIBIT "B," and (iii) any statement made by
any member of Jordan's organization during any interview or chat session
broadcast or distributed over the SportsLine Service or the Jordan Web
Site.
b) REPRESENTATIONS AND WARRANTIES. Jordan shall be solely responsible for
the content of all Jordan Information, and represents and warrants to
SportsLine that:
i) All Jordan Information (A) shall be accurate and Jordan's own and
original creation, except for information validly Iicensed for use
by Jordan or in the public domain; (B) will consist only of
information that Jordan is authorized to use and to authorize
SportsLine to use as contemplated in this Agreement; (C) will not
constitute a libel or defamation or conflict with any copyright,
right of privacy or other rights of, and will not cause injury to,
any third party; and (D) will conform to all applicable federal,
state and local laws and regulations and any other governmental or
quasi- governmental laws or regulations of the United States or
any other country.
ii) Jordan has the full right and authority to grant the rights and
consents set forth herein.
iii) SportsLine shall be entitled at any time to bring any concerns it
has regarding the Jordan Information to the attention of Jordan,
whereupon the parties will cooperate in good faith to address
SportsLine's concerns. If SportsLine, in its reasonable judgment,
believes that immediate action is required with regard to any of
the Jordan Information, SportsLine may delete, modify or revise
such information, provided that SportsLine shall notify Jordan of
such action
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prior thereto, if reasonably possible (or, if not, as soon
thereafter as commercially practicable). In the event Jordan
ceases to maintain his high-profile as a pre-eminent spokesperson
and/or entertainer, and becomes completely inactive as an
endorser, Jordan agrees to discuss in good faith with SportsLine
some protection to the rights and obligations hereunder.
c) DELIVERY; EDITORIAL STANDARDS. All Jordan Information and updates shall
be transmitted by land-line telephone or electronically in the format
specified by SportsLine. All content supplied by Jordan shall be
consistent with the editorial standards used by SportsLine for content
displayed on the SportsLine Service (which standards SportsLine reserves
the right to amend from time to time).
10. NBA/BULLS TRADEMARKS. SportsLine acknowledges that Jordan has no right to
grant, nor does he purport to grant, the use of the Chicago Bulls' name,
uniform and/or insignias or any other trademarks associated with the
National Basketball Association. However, Jordan shall instruct his
agent(s), attorney(s) and/or business manager(s) to use their best efforts
to assist SportsLina to obtain clearances for such uses.
11. SPORTSLINE SERVICE. SportsLine shall have sole discretion to determine all
aspects of the operation of the SportsLine Service and all matters relating
to the content, structure and sequence of material appearing on the
SportsLine Service. Without limiting the generality of the foregoing,
SportsLine shall have sole discretion to determine the amount and basis of
any fee charged to subscribers for use of the SportsLine Service, and
SportsLine exclusively will bill for and collect all fees charged to
subscribers to use the SportsLine Service. Nothing in this Agreement shall
limit SportsLine's rights regarding charges for any aspect of the SportsLine
Service (including any product or service offered by SportsLine, whether
alone or in conjunction with others, through means of the SportsLine
Service). All right, title and interest in . SportsLine's name, trade
name(s), trademark(s) and service mark(s), copyrights, and all other
intellectual property (collectively, "SPORTSLINE'S INTELLECTUAL PROPERTY")
are and shall remain. SportsLine's. Nothing herein shall be deemed to grant
Jordan any proprietary rights to any of SportsLine's Intellectual Property.
12. PREMIUM FEATURES/FAN CLUBS. SportsLine shall ba responsible for the concept
design and creation of all Premium Features, including the official
exclusive online and off-line Jordan fan clubs (collectively, the
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"FAN CLUBS") that allow Jordan to communicate with Jordan's fans through
regular e-mail messages, columns and newsletters, to record audio clips that
allow fans to listen to live and previously recorded interviews and
insights, and to play video clips and highlights from previously- recorded
interviews and games and events (collectively, "ELECTRONIC MEANS"). Jordan
will answer five (5) electronic mail questions per week received from
members of Jordan online Fan Club, if and to the extent such questions are
timely forwarded by SportsLine, given Jordan's schedule; and will use best
efforts to introduce SportsLine to Jordan's endorsers and licensees to
promote the Jordan Fan Clubs and to facilitate the acquisition of
merchandise and/or memorabilia for sale through and. In addition, SportsLine
will create, operate and maintain the exclusive official Jordan off-line Fan
Club that allows Jordan to communicate with his fans through means other
than Electronic Means.
a) With respect to both the official online and off-line Fan Club,
SportsLine shall be responsible for the following services (the "FAN
CLUB SERVICES"):
i) Creating and marketing a Fan Club membership package which shall
be subject to Jordan's and FAME's prior approval.
ii) Creating a mailing list consisting of Members (as defined below).
SportsLine agrees, at the request of Jordan given at any time or
times during the Term, to deliver to Jordan, at SportsLine's cost,
a copy of the then-current mailing list for the Fan Clubs.
SportsLine acknowledges and agrees that Jordan shall have the
right to make use of the Fan Clubs' membership list for any
purpose permitted by law which Jordan may designate (including,
without limitation, licensing or selling such !ist) without the
obligation to pay any fee or compensation to SportsLine.
iii) Soliciting individuals to become "Fan Club members" (the
"MEMBERS").
iv) If mutually agreed upon, writing and sending and/or distributing
to the Members periodic newsletters, press releases and touring
schedule updates, all of which shall be subject to Jordan's and
FAME's prior approval.
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v) Providing Members with an "official" membership card, information
packet and other promotional materials relating to the Fan Clubs,
all of which shall be subject to Jordan's and FAME's prior
approval.
vi) If mutually agreed upon, creating a merchandising presence within
the Jordan Web Site to provide Members with opportunities to
purchase officially-licensed Fan Club merchandise, all of which
shall be subject to further agreement between Jordan and
SportsLine.
vii) Collecting all income generated from the Fan Clubs' activities
accounting for and distributing the income as set forth herein.
viii) Such other services and activities as the parties may hereafter
agree.
If at any time during the Term, SportsLine or Jordan desires to add
additional Fan Club Services, then SportsLine may submit such request in
writing to Jordan, or Jordan may submit such request in writing to
SportsLine, and upon receipt thereof, the parties shall discuss in good
faith the possibility of adding such additional services.
b) SportsLine shall operate the Fan Clubs in accordance with the following
guidelines:
i) Fan club dues shall be established upon mutual agreement of the
parties.
ii) Jordan shall have final approval of all information, including
photographs, video clips, etc., to be sent, broadcast or made
accessible to Members and/or used in connection with the Fan
Clubs, and of the parameters or rules of any Fan Club conventions
and/or contests ("FAN CLUB ACTIVITIES"). SportsLine shall submit
each of these Fan Club Activities to Jordan in writing for
Jordan's and FAME's approval.
13. CONTESTS. Jordan and FAME agree and acknowledge that their respective
employees, consultants and/or advisors and members of their respective
immediate families (immediate family is defined as parent, sibling or any
person residing in the same household as employee or consultant) shall not
eligible to play SportsLine contests for prizes.
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14. PRESS RELEASES. It is the intent of the parties to issue a joint press
release announcing the formation of the relationship created hereby.
However, it is agreed that no party will issue any such press release
without the prior written consent of the other parties.
15. ENFORCEMENT ACTION. If either party obtains information that the rights
granted by Jordan to SportsLine have been breached by a third party, such
information shall be promptly transmitted to the other party. SportsLine
shall have the right, but not the obligation, to commence an action against
the breaching third party; provided, however, SportsLine agrees to commence
appropriate action if requested to do so by Jordan and/or FAME, but only to
the extent approved by SportsLine's outside counsel and further subject to
mutual agreement among SportsLine, FAME and Jordan regarding division of the
expense of retaining outside counsel. If requested by SportsLine, Jordan
shall enter such action against such third party as an additional party
plaintiff.
16. ARBITRATION. The parties are desirous of reducing the time and costs of
resolving disputes. Accordingly, any claim or controversy arising out of or
in connection with the construction or application of any term, provision or
condition of this Agreement and shall be settled by final and binding
arbitration in the State of Illinois under the Rules of the American
Arbitration Association;-provided, however, that any such matter submitted
to arbitration shall be presided over by a panel of at least three (3)
arbitrators who each shall have experience in the area of intellectual
property law. The decision of the arbitrators shall- be binding upon the
parties. The reasonable cost of arbitration shall be borne by the losing
party or in such proportion as the arbitrator shall decide. Judgment on the
award rendered by the arbitrator may be entered in any court in the world
having jurisdiction. The provisions of this paragraph shall survive any
expiration or earlier termination of this Agreement.
17. INDEMNIFICATION BY SPORTSLINE. SportsLine shall indemnify, defend and hold
Jordan harmless from and against all claims, costs, liabilities, judgments,
expenses or damages (including reasonable attorneys' fees and court costs)
arising from or related to any cause of action brought against Jordan by any
person or entity that is not a party to this Agreement arising from or
related to this Agreement. This paragraph shall survive any expiration or
earlier termination of this Agreement.
18. INDEMNIFICATION BY JORDAN. Jordan shall indemnify, defend and hold
SportsLine harmless from and against all claims, costs, liabilities,
judgments, expenses or damages (including reasonable attorneys' fees
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and court costs) arising from or related to any cause of action brought
against SportsLine by any person or entity that is not a party to this
Agreement arising from or related to (i) any Jordan Information displayed
through the Jordan Web Site or the SportsLine Service, (ii) the content of
any Jordan Information, and (iii) any breach of this Agreement, provided
SportsLine promptly notifies Jordan of any such claim and provides Jordan
the opportunity to control the defense of the action and all negotiations
for settlement or compromise. This paragraph shall survive any expiration or
earlier termination of this Agreement
19. LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING STATED OR IMPLIED TO THE
CONTRARY HEREIN, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR
EXEMPLARY, PUNITIVE, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT
LIMITED TO LOST PROFITS, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES,
IN ANY MANNER ARISING OUT OF THIS AGREEMENT OR THE BREACH OF ANY TERM,
COVENANT, REPRESENTATION, WARRANTY OR OBLIGATION CONTAINED HEREIN. THIS
PARAGRAPH SHALL SURVIVE ANY EXPIRATION OR EARLIER TERMINATION OF THIS
AGREEMENT
20. CONFIDENTIALITY. All information disclosed by either party to the other
party, including but not limited to the terms and conditions of this
Agreement or any other agreement between the parties, trade secrets of the
parties, any nonpublic information relating to a party's product plans,
designs, ideas, concepts, costs, prices, finances, marketing plans, business
opportunities, personnel, research, development or know-how and any other
nonpublic technical or business information of a party, that is marked
"CONFIDENTIAL" or identified by the disclosing party in writing as
confidential before or within thirty (30) calendar days after disclosure to
the receiving party, shall be treated as confidential by the receiving party
and not disclosed to any third party, including, but not limited to the NBA,
NBA Properties, the National Basketball Players Association and any other
entity of the NBA or the Chicago Bulls, without the disclosing party's
consent or unless required by law.
Confidential Information shall not include information that: (a) is now or
subsequently becomes generally available to the public through no fault or
breach on the part of the receiving party; (b) the receiving party can
demonstrate to have had lawfully in its possession without an obligation of
confidentiality prior to disclosure hereunder; (c) is independently
developed by the receiving party without the use of any Confidential
Information of the disclosing party as evidenced by written documentation;
or (d) the receiving party lawfully obtains from a third
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party who has the right to transfer or disclose it and who provides it
without any obligation to maintain the confidentiality of such information.
This paragraph shall survive any expiration or earlier expiration of this
Agreement.
21. TERMINATION. In the event of a material breach of this Agreement by either
party, the other party may terminate this Agreement on thirty (30) calendar
days' written notice to the breaching party unless the breach is corrected
within the thirty (30) day period. Termination under this paragraph shall
not affect the right of the non-breaching party to recover damages from the
breaching party. No expiration or termination of this Agreement shall affect
or impair either party's rights or remedies under this Agreement that have
accrued or arisen as of or prior to such termination. Following the
effective date of termination, no further obligations of either party to the
other shall accrue under this Agreement, provided that termination shall not
relieve either party of any obligations arising prior to the effective date
of termination.
22. RELATIONSHIP OF THE PARTIES. The parties to this Agreement are independent
contractors, and this Agreement shall not be construed to create a
partnership, joint venture, employment or principal agent relationship
between the parties. Each party shall be solely responsible to compensate
any employees! agents or representatives employed or engaged by it to
perform duties under this Agreement and for all taxes, imposts, duties and
all charges of any governmental authority arising from its or his activities
under this Agreement. Neither SportsLine, FAME nor Jordan, nor any person or
entity employed by any of them, are authorized to make any representation or
warranty concerning the other parties or incur or assume any obligation or
liability for the other parties.
23. AMENDMENT: WAIVER. No amendment to this Agreement shall be valid unless such
amendment is in writing and is signed by the party against whom enforcement
is sought. Any of the terms and conditions of this Agreement may be waived
at any time in writing by the party entitled to the benefit thereof, but a
waiver in one instance shall not be deemed to constitute a waiver in any
other instance. A failure to enforce any provision of this Agreement shall
not operate as a waiver of the provision or of any other provision hereof.
24. SEVERABILITY. In the event that any provision of this Agreement shall be
held to be invalid, illegal or unenforceable in any circumstances, the
remaining provisions shall nevertheless remain in full force and effect
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and shall be construed as if the unenforceable portion or portions were
deleted.
25. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Illinois without regard
to its conflict of law principles.
26. NOTICES. All notices or other communications hereunder shall be in writing
and shall be deemed to be given or made when delivered by overnight courier
or first-class, postage prepaid, registered or certified mail to the
following address or addresses or such other address or addresses as either
party may designate in writing to the other in accordance with this
paragraph:
If to SportsLine: SportsLine USA, Inc.
6340 NW 5th Way
Fort Lauderdale, Florida 33309
Attn: President
If to Jordan or FAME: Falk Associates Management
Enterprises
5335 Wisconsin Avenue, NW, Suite 850
Washington, DC 20015
Attention: David Falk
27. ASSIGNMENT.
Neither Jordan nor SportsLine shall have the right to grant sublicenses
hereunder or to otherwise assign, alienate, transfer, encumber, or
hypothecate (all of the foregoing hereinafter "transfer") any of their
rights or obligations hereunder without the prior written consent of the
other. SportsLine may, without the approval of Jordan or FAME, transfer its
rights and/or obligations hereunder in connection with a consolidation,
merger or sale of all or substantially all of SportsLine's assets with any
other entity. However, in the event:
(i) SportsLine proposes to effect a merger or consolidation with any entity
(a "MERGING ENTITY") which is a major direct competitor of a major
brand-name of any of the Jordan Endorsement Companies including, without
limitation, NIKE, Wilson Sporting Goods, The Upper Deck Company,
McDonald's, Wheaties, Gatorade, Bijan, WorldCom or Rayovac (a "MAJOR
DIRECT COMPETITOR"), and
CONFIDENTIAL AND PROPRIETARY
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<PAGE>
(ii) Jordan has advised SportsLine specifically and in writing, at least
thirty (30) days before Jordan receives such notice of such merger or
consolidation or such merger or consolidation is publicly announced,
that such Merging Entity is a Major Direct Competitor within the
meaning of this paragraph,
then Jordan shall have the right to terminate this Agreement by so notifying
SportsLine in writing on or before thirty (30) days after Jordan has
received notice of such proposed merger or consolidation (provided that such
termination shall not be effective if the merger or consolidation is not
consummated or if those elements of the Merging Entity which make it a Major
Direct Competitor are "spun off" and not included in the resulting company
of which SportsLine is a part); provided, however, that, at SportsLine's
option and in SportsLine's sole and absolute discretion, Jordan shall
continue to receive all such Deficiency Payments in accordance with the
amounts and schedule provided in Exhibit C and paragraph 3 hereof shall
remain in full force and effect during the remainder of the Term as if this
Agreement had not been terminated.
28. COMPLIANCE WITH LAWS. Each party shall comply with applicable law in
connection with the development and publication of the Jordan Web Site.
Jordan and FAME and SportsLine agree, in particular, to comply with all laws
concerning obscenity, defamation, infringement, rights of privacy,
harassment and export controls, among others, and to ensure that the use,
reproduction and distribution of the content contained in Jordan Web Site in
and of itself, does not violate such laws or related legal rights of third
parties.
29. ACKNOWLEDGMENT AND PROTECTION OF THE LICENSED RIGHTS.
(a) SportsLine recognizes and acknowledges the exclusive rights of Jordan in
and to the Jordan Endorsement. Nothing contained in or contemplated
under this Agreement will be construed to confer upon SportsLine any
right to have the Jordan Endorsement registered in the name of
SportsLine or to vest in SportsLine any right of ownership to the Jordan
Endorsement, and SportsLine will not, directly or indirectly, use,
register or cause to be used or registered, any word, symbol, character
or set of words, symbols or characters, trademark, trade name, service
mark or copyright consisting of, related to, similar to and/or
confusingly similar to any part of the Jordan Endorsement.
(b) During the term of this Agreement and following the expiration or
termination of this Agreement for any reason, SportsLine will not
CONFIDENTIAL AND PROPRIETARY
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<PAGE>
(i) challenge the validity of ownership in or right to license, the
Jordan Endorsement, (ii) contest the fact that SportsLine's rights under
this Agreement are solely those of SportsLine and terminate upon
expiration or termination of this Agreement, (iii) represent in any
manner that SportsLine has any title or right to the ownership,
registration or use of any of the Jordan Endorsement in any manner
except as set forth in this Agreement, or (iv) challenge the right of
Jordan to grant a license for the Jordan Endorsement (unless in conflict
with the rights granted to SportsLine under this Agreement). Any and all
goodwill associated with or identified by the Jordan Endorsement will
inure directly or exclusively to the benefit and is the property of
Jordan.
(c) SportsLine will not (i) cause which may damage or endanger the Jordan
Endorsement or other trade name, trademark, service mark or intellectual
property right of Jordan, Jordan's title thereto or the rights of any
other licensee or franchisee, nor (ii) interfere in any manner with nor
attempt to prohibit the use or registration by Jordan of the Jordan
Endorsement or other trade name or trademark or service mark owned or
licensed by Jordan.
30. HEADINGS. Paragraph headings are for convenience only and shall not be used
in any manner to construe this agreement.
31. ENTIRE AGREEMENT. This Agreement, and the exhibits attached hereto,
constitutes the entire agreement of the parties with respect to the subject
matter hereof and supersedes all prior and/or contemporaneous agreements and
understandings, written or oral between the parties with respect to the
subject matter hereof.
32. EXECUTION IN COUNTERPARTS. This Agreement may be executed by the parties in
counterparts, each of which when so executed and delivered shall be deemed
to be an original and all of which when taken together shall constitute one
and the same agreement.
CONFIDENTIAL AND PROPRIETARY
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<PAGE>
IN WITNESS WHEREOF, each of the parties has executed this Agreement as of the
date first written above.
SportsLine USA, Inc.,
a Delaware corporation
By: /s/ MICHAEL LEVY
------------------
Name: Michael Levy
Title: President
/s/ MICHAEL JORDAN
---------------
Michael Jordan (by [illegible]
atty in fact)
Falk Associates Management Enterprises
By: /s/ DAVID FALK
-----------------------------
Name: David Falk
Title: Chairman
CONFIDENTIAL AND PROPRIETARY
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<PAGE>
CONFIDENTIAL INFORMATION OMMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
EXHIBIT "A"
TERM
The Term of this Agreement shall commence on the Effective Date and shall
continue in effect for ten (10) years from the date of execution of this
Agreement, unless sooner terminated according to the terms of this Agreement.
*****.
CONFIDENTIAL AND PROPRIETARY
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<PAGE>
EXHIBIT "B"
SERVICES, RIGHTS & CONTENT
1. SPORTSLINE RESPONSIBILITIES. SportsLine shall be responsible for the
following in connection with the Jordan Web Site:
a) All aspects of the technical development, graphical user interface,
production and maintenance of the Jordan Web Site.
b) All customer service, technical support, billing, fulfillment, credit
card authorization and processing associated with the sale of Premium
Features (as defined herein).
c) Concept design and creation of all Premium Features, including the
official exclusive online and off-line line Jordan Fan Clubs.
d) Maintenance of a merchandise area within the SportsLine Service
(including, without limitation, the Jordan Web Site) through which
SportsLine and Jordan will be able to sell merchandise, memorabilia and
custom signed products, and be responsible for all customer service,
technical support, billing, fulfillment, credit card authorization and
processing associated therewith.
2. EDITORIAL CONTROL OF THE JORDAN WEB SITE. Jordan shall have complete control
over the content of the Jordan Web Site, and Jordan shall be responsible to
provide SportsLine with all cleared content and information (including but
not limited to artwork, photos, articles and news clippings, biographical
information, audio and video clips, etc.) necessary to create and maintain
the Jordan Web Site, and shall use his best efforts to assist SportsLine in
acquiring and clearing any information and content not otherwise in Jordan's
possession. SportsLine shall consult with Jordan and FAME in order for the
Jordan Web Site content and programming to be consistent with Jordan's web
program and Jordan's overall marketing program.
3. JORDAN'S SERVICES. Jordan shall provide the following services to
SportsLine:
a) Conduct at least one (1) five (5) minute interview (by land-line
telephone) on a weekly basis in a format designated by SportsLine.
SportsLine will broadcast the audio, as permitted hereby, including but
not limited to transcription of the questions and answers into a column
format and/or use in chat sessions.
CONFIDENTIAL AND PROPRIETARY
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<PAGE>
SportsLine agrees that, as time restraints dictate, and subject to
Jordan's absolute discretion, such interviews and/or chat sessions may
be bundled on a monthly basis consisting of one (1) twenty (20) minute
interview in each month. Jordan acknowledges that SportsLine may, at
SportsLine's option, syndicate content from the SportsLine Service and
the Jordan Web Site in different media, and Jordan expressly authorizes
such syndication.
b) Answer five (5) electronic mail questions per week received from his
fans. SportsLine agrees that FAME shall be permitted to process the
electronic mail questions to facilitate a response from Jordan.
c) Make one (1) personal appearance (e.g., a due diligence meeting for
potential investors in an initial public offering of SportsLine's stock,
press conference, radio or television commercial, etc.) during the Term
lasting no longer than one (1) hour in duration. Any other appearances
requested by SportsLine shall be subject to Jordan's approval, in
Jordan's absolute discretion.
d) SportsLine may include in its letterhead Jordan's name and permit
SportsLine to use Jordan's name, photos and other materials reasonably
necessary to promote SportsLine and the Jordan Web Site. In each
instance, Jordan will have an opportunity to approve such use, which
approval shall not be unreasonably withheld; provided, however, that
SportsLine shall have the right without any prior approval to use screen
shots for promotional purposes as otherwise provided herein.
e) If requested by SportsLine and subject to Jordan's schedule, Jordan
agrees to make himself available for a photo shoot during the Term, not
to exceed four (4) hours, to provide SportsLine with photographs and
other materials reasonably necessary for SportsLine to promote its
service online and off-line (including print, radio, and television) and
to be used in the Jordan Web Site.
f) Serve as spokesmen for SportsLine to promote the appropriate
sports-related products and services offered on the SportsLine Service,
and subject to his absolute discretion, to appear in radio and/or
television commercials;
g) If requested by SportsLine and in Jordan's absolute discretion, Jordan
agrees to provide a mutually agreed upon number of items of autographed
merchandise, memorabilia, and/or custom signed
CONFIDENTIAL AND PROPRIETARY
Page -21-
<PAGE>
products to be distributed for free to SportsLine Service Subscribers
and/or members of Jordan's Fan Clubs as part of their membership kit.
h) Use best efforts to facilitate a relationship between SportsLine and The
Upper Deck Company that will ensure that SportsLine has access to (i) a
complete inventory of items of autographed merchandise and memorabilia;
(ii) product inventory and fulfillment capabilities sufficient to
satisfactorily support the projected demands of the parties' mutual
customers; (iii) digitized images of products or agree to develop such
images; and (iv) current costs/MSRP and accurate descriptive information
on all products. In addition, subject to Upper Decks' approval and
cooperation, Jordan agrees to develop a complete line of custom signed
products exclusively for sale on Jordan's Web Site, including game-worn
and game-used products, apparel and equipment. With respect to such
game-worn and game-used products, lordan shall, after each event in
which any such item is worn or otherwise used, promptly send all such
items to SportsLine cleaned and autographed for sale and/or auction on
Jordan's Web Site, provided, however, that nothing in this Agreement
shall cause or require Jordan to provide SportsLine with any autographs,
or any additional time, in connection with such autographed merchandise
and memorabilia. SportsLine agrees and acknowledges that any and all
autographs must come from the Upper Deck Company pursuant to Jordan's
agreement with the Upper Deck Company.
SportsLine agrees and acknowledges that any and all services from Jordan
required and/or requested by SportsLine shall be subject to Jordan's
schedule.
4. ADDITIONAL CONCEPTS. In addition to the foregoing, SportsLine and Jordan
agree to work together to create new and innovative products and concepts to
constantly improve the Jordan Web Site to keep it on the cutting edge.
CONFIDENTIAL AND PROPRIETARY
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<PAGE>
CONFIDENTIAL INFORMATION OMMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
EXHIBIT "C"
CONSIDERATION
1. DEFINITIONS. The term "NET SPONSORSHIP REVENUES" means SportsLine's gross
revenues from the sale of sponsorships appearing on the Jordan Web Site,
MINUS sales commissions and fees payable by SportsLine to third parties and
other mutually agreed upon out-of-pocket expenses incurred by SportsLine and
directly associated with the generation of such revenues. The Term "NET
ADVERTISING REVENUE" means SportsLine's gross revenues from the sale of
advertising appearing on the Jordan Web Site, MINUS sales commissions and
fees payable by SportsLine to third parties and other mutually agred upon
out-of-pocket expenses incurred by SportsLine and directly associated with
the generation of such revenues. The term "NET MERCHANDISING REVENUES" means
SportsLine's gross revenues from the sale of any products (including but not
limited to merchandise and memorabilia) sold on the Jordan Web Site, MINUS
the cost of goods sold and, MINUS, all credit card processing fees, shipping
expenses and other transaction costs incurred by SportsLine in making such
sales. The term "NET PREMIUM REVENUES" means SportsLine's gross revenues
from the sale of any unique membership programs/fan clubs, etc., offered via
the Jordan Web Site (the "PREMIUM FEATURES"), MINUS out-of-pocket expenses
incurred by SportsLine and directly associated with the generation of such
revenues.
2. ADVERTISING/SPONSORSHIPS. Jordan will receive ***** of Net Sponsorship
Revenues and Net Advertising Revenues attributable to sponsorships and
advertisements on the Jordan Web Site. Jordan will only receive ***** of Net
Advertising Revenues attributable to any under-delivered advertising
impressions ("make good impressions") on the Jordan Web Site, which Jordan
requests be fulfilled within SportsLine's general advertising rotation.
3. EQUITY. SportsLine shall grant to Jordan warrants, pursuant to the terms of
the Warrant Agreement attached hereto as EXHIBIT "F," to purchase four
hundred thousand (400,000) shares of SportsLine's Common Stock at an
exercise price of ***** per share, which warrants will vest on a pro-rata
basis at the rate of ***** per year to be vested on each anniversary date
over the first ***** years of the Term. In connection with the issuance of
the Warrants, Jordan agrees to enter into the "Lock-Up" Agreement attached
hereto as EXHIBIT "G", and any similar agreements as may be required by
SportsLine's underwriters and/or lenders in connection with any further
securities offerings and/or financings.
CONFIDENTIAL AND PROPRIETARY
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<PAGE>
CONFIDENTIAL INFORMATION OMMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
4. MERCHANDISE AND MEMORABILIA. Jordan will receive ***** of Net Merchandising
Revenue received by SportsLine from the sale of all merchandise or
memorabilia on the Jordan Web Site.
5. PREMIUM FEATURES. Jordan will receive ***** of the Net Premium Revenues
received by SportsLine.
6. MINIMUM GUARANTEE. Beginning in the sixth (6th) year of the Term, SportsLine
shall pay to Jordan a Deficiency payment (individually, a "DEFICIENCY
PAYMENT") in the following amounts subject to the following criteria:
On or before: Cumulative Consideration
------------------------
6/19/03 *****
6/19/04 *****
6/19/05 *****
6/19/06 *****
6/19/07 *****
a) Each Deficiency Payment shall be calculated by taking the amount of the
applicable Cumulative Consideration and subtracting the following
amounts (collectively, the "OFFSETS"):
i) the amount by which the sum of the following exceeds *****:
(A) the unrealized appreciation during the first five(5) years of
the Term, of the shares of SportsLine's common stock for which
Jordan has been granted warrants, (B) the cumulative realized
appreciation during the first five(5) years of the Term of shares
of SportsLine stock sold by Jordan as of the date for which the
Deficiency Payment is being determined, and (C) the total amount
of Profit Sharing paid to Jordan during the first five(5) years
of the Term;
ii) the cumulative unrealized appreciation in years subsequent to
year five(5), determined as of the close of the market on the
respective date for which the Deficiency Payment is being
determined, of the shares of SportsLine's common stock for which
Jordan has been granted warrants;
iii) the cumulative realized appreciation in years subsequent to year
five(5), determined as of the close of the market on the
respective date for which the Deficiency Payment is being
CONFIDENTIAL AND PROPRIETARY
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<PAGE>
CONFIDENTIAL INFORMATION OMMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
determined, of shares of SportsLine stock sold by Jordan as of
the date for which payment is being determined;
iv) the total cumulative amount of Profit Sharing earned in years
subsequent to year five(5) of the Term and paid to Jordan; and
v) all previous years' Deficiency Payments, if any.
For purposes of the foregoing, the term "Profit Sharing" means amounts
payable to Jordan pursuant to paragraphs 1, 3 and 4 of this EXHIBIT "B."
In all events, the total amount of guaranteed compensation due to Jordan
hereunder shall not exceed *****.
7. REASONABLE OUT-OF-POCKET EXPENSES. SportsLine will reimburse Jordan for all
reasonable actual out-of-pocket expenses as approved in advance by
SportsLine and incurred by Jordan in performing services requested by
SportsLine. If requested by SportsLine to travel, Jordan shall receive
reimbursement for the fair market value of first class travel and
accommodations for himself and one guest in connection with his performance
of the services required of Jordan, but SportsLine agrees and acknowledges
that Jordan shall be free to travel in any manner, including by private jet.
However, Jordan agrees that SportsLine's maximum liability to Jordan in
connection with Jordan's travel shall be the fair market value of first
class travel, accommodations and other expenses for Jordan and one guest.
8. RECORDS; AUDIT. SportsLine shall make Profit Sharing payments due to Jordan
underthis Agreement on a quarterly basis, within thirty (30) calendar days
following the end of the applicable quarter; such quarters ending on January
30, March 31, June 30, and September 30 of each year. Each such payment
shall be accompanied by a statement showing in reasonable detail how such
payment was computed. SportsLine will create, and maintain for a period of
not less than one (1) year following the end of the applicable calendar
year, records that accurately reflect the basis and calculation for the
payments required under this Agreement. Within ninety (90) calendar days
following the end of each calendar year, Jordan may request an audit of the
payments made by SportsLine hereunder. Such audit may be conducted by an
independent auditing firm selected by Jordan at its expense; provided, that
if an audit documents that SportsLine has underpaid Jordan in any calendar
year by an amount equal to five percent (5%) or more of the amount that
should have been paid hereunder, then SportsLine shall reimburse Jordan for
its actual cost incurred to the independent auditing firm to conduct such
audit. Jordan's independent auditor shall not disclose to Jordan or any
third party the contents of the SportsLine's
CONFIDENTIAL AND PROPRIETARY
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<PAGE>
books and records, other than information necessary to determine the
calculation of the correct amount of any payments required to be made
hereunder.
CONFIDENTIAL AND PROPRIETARY
Page -26-
<PAGE>
EXHIBIT "D"
JORDAN ENDORSEMENT COMPANY LISTING (CONFIDENTIAL)
CONFIDENTIAL IN-HOUSE USE ONLY
Nike, Inc. Electronic Arts Sports Network
One Bowerman Drive 1450 Fashion Island Blvd.
Beaverton, OR 97005 San Mateo, CA 94404
Phone: (503) 671-6453 Phone: (415) 513-7280/7514
Fax: (503) 671-6300 Fax: (415) 513-7449
Gatorade NBA Entertainment (CBS/Fox Video)
321 N. Clark St. 450 Harmon Meadow Blvd.
Chicago, IL 60610 Secaucus, NJ 07094
Phone: (312) 222-7709 Phone: (201) 865-1500
Fax: (312) 222-8772/6490 Fax: (201) 865-9345
Wilson Sports Goods, Co. Ohio Art Toy Company
8700 W. Bryn Mawr Ave. One Toy Street
Chicago, IL 60631 Bryan, OH 43506
Phone: (312) 714-6400/6891 Phone: (419) 636-3141
Fax: (312) 714-4598 Fax: (419) 636-7614
Sara Lee Corporation Warner Brothers
P.O. Box 2760 4000 Warner Blvd.
Winston-Salem, NC 27102 Burbank, CA 91522
Phone: (910) 519-7067 Phone: 818-954-6450
Fax: (910) 519-7160 Fax: (818) 954-6745
The Upper Deck Company Chicago Chevyland Dealers Assoc
5909 Sea Otter Place c/o Eisamon, Johns & Laws
Carlsbad, CA 92008 401 N. Michigan Avenue
Phone: (619) 929-6500/3065 Chicago, IL 60611
Fax: (619) 929-6547/3196 Phone: (312) 828-0400
Fax: (312) 828-0748
McDonald's Corporation Rare Air, Ltd
One Kroc Drive 130 Washington Street
Oak Brook, IL 60521 West Dundee, IL 60118
Phone: (708) 575-6594 Phone: (708) 426-9966
Fax: (708) 575-5792 Fax: (708) 426-3552
CONFIDENTIAL AND PROPRIETARY
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<PAGE>
EXHIBIT "D" (CONT'D)
General Mills/Wheaties Brand Michael Jordan's Restaurant
One General Mills Blvd. 500 North LaSalle Street
Minneapolis, MN 55426 Chicago, IL 60614
Phone: (612) 540-7616
Fax: (612) 540-3945
The Oakley Company The Rayovac Company
10 Holland Drive 601 Rayovac Drive
Irvine, Ca 92716 Madison, WI 53711-2497
P.O. Box 44960
Madison, WI 53711-4960
CONFIDENTIAL AND PROPRIETARY
Page -28-
<PAGE>
CONFIDENTIAL INFORMATION OMMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
EXHIBIT "E"
*****
CONFIDENTIAL AND PROPRIETARY
Page -29-
<PAGE>
CONFIDENTIAL INFORMATION OMMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
EXHIBIT "F"
FOUR HUNDRED THOUSAND (400,000) WARRANTS
THESE WARRANTS AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THESE
WARRANTS (THE "WARRANT SHARES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE "SECURITIES ACT") OR UNDER APPLICABLE STATE SECURITIES LAWS.
THE WARRANT SHARES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDERTHE SECURITIES ACT AND ANY APPLlCABLE STATE SECURITIES LAWS OR
PURSUANT TO AVAILABLE EXEMPTIONS FROM SUCH REGISTRATION, PROVIDED THAT THE
SELLER DELIVERS TO THE COMPANY AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
CONFIRMING THE AVAILABILITY OF SUCH EXEMPTION. INVESTORS SHOULD BE AWARE THAT
THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
_________________, 1997
SPORTSLINE USA, INC.
WARRANTS FOR THE PURCHASE OF SHARES OF COMMON STOCK
FOR VALUE RECEIVED, SPORTSLINE USA, INC., a Delaware corporation
("SportsLine" or the "Company"), hereby certifies that Michael Jordan or his
registered assigns (the "Holder") is entitled, subject to the provisions
contained herein, to purchase from the Company Four Hundred Thousand (400,000)
fully paid and non-assessable shares of Common Stock (as defined below), subject
to adjustment as provided herein, at an exercise price per share of Common Stock
(the "Exercise Price", of $****.
The term "Common Stock" means the Common Stock, par value $.01 per
share, of the Company as constituted on the date hereof. The number of shares of
Common Stockto be received upon the exercise of these Warrants may be adjusted
from time to time as hereinafter set forth. The shares of Common Stock
deliverable upon such exercise, and as adjusted from time to time, are
hereinafter referred to as "Warrant Stock." The term "Other Securities" means
any other securities that may be issued by the Company in addition to, or in
substitution for, the Warrant Stock.
CONFIDENTIAL AND PROPRIETARY
Page -30-
<PAGE>
CONFIDENTIAL INFORMATION OMMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
References herein to the "Company" are to (i) SportsLine and any
successor thereto, (ii) any successor corporation resultng from the merger or
consolidation of SportsLine, or any successor thereto, with another corporation
or (ii) any corporation to which SportsLine, or any successor thereto, has
transferred its property or assets as an entirety or substantially as an
entirety.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of these Warrants, and (in the
case of loss, theft or destruction) of reasonably satisfactory indemnification,
and upon surrender and cancellation of these Warrants, if mutilated, the Company
shall execute and deliver new Warrants of like tenor and date. Any such new
Warrants, upon execution and delivery, shall constitute an additional
contractual obligation on the part of the Company, whether or not these Warrants
so lost, stolen, destroyed or mutilated shall be at any time enforceable by
anyone.
The Holder agrees with the Company that these Warrants are issued, and
all the rights hereunder shall be held subject to, all of the conditions,
limitations and provisions set forth herein, including the following:
1. EXERCISE OF WARRANTS.
1.1 EXERCISE PERIOD: METHOD OF EXERCISE. These Warrants shall vest and
become exercisable as follows: (a) with respect to ***** shares of Common
Stock, one (1) year after the date first written above; and (b) with respect to
an additional ***** shares of Common Stock, at the end of each consecutive one
(1) year period thereafter until the Warrants have become exercisable with
respect to the total number of shares of Common Stock set forth above; provided,
however, that the vesting of the Warrants shall be subject to the condition that
that certain Advisory Agreement dated as of ___________________, 1997 (the
"Advisory Agreement") between SportsLine and the Holder, as amended or modified,
shall be in effect at the relevant vesting date(s), and no further Warrants
shall vest on or after the expiration, nonrenewal or termination of said
agreement. Subject to the foregoing, any vested Warrants may be exercised, in
whole or in part, at any time, or from time to time during the period commencing
on the date hereof and expiring on the date of expiration or earlier termination
of the Advisory Agreement, by presentation and surrender of these Warrants to
the Company at its principal office (which on the date hereof is 6340 N.W. 5th
Way, Ft. Lauderdale, Florida 33309), or at the office of its stock transfer
agent (which on the date hereof is the Company), if any, with the Warrant
Exercise Form attached hereto duly executed and accompanied by payment (either
in cash or by certified or official bank check or checks, payable to the order
of the Comparny) of the Exercise Price for the number of shares specified in
such form. If these Warrants are exercised in part only, the Company shall, upon
surrender of these Warrants
CONFIDENTIAL AND PROPRIETARY
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<PAGE>
for cancellation, execute and deliver new Warrants evidencing the rights of the
Holder thereof to purchase the balance of Warrant Stock (and Other Securities)
purchasable hereunder. Upon receipt by the Company of these Warrants, together
with the Exercise Price, at its office, or by the Company's stock transfer agent
at its office, in proper form for exercise, the Holder shall be deemed to be the
holder of record of the Warrant Stock (and Other Securities) issuable upon such
exercise, notwithstanding that the transfer books of the Company shall then be
closed or that certificates representing such Warrant Stock (or Other
Securities) shall not then be actually delivered to the Holder. The Company
shall pay any and all documentary stamp or similar issue or transfer taxes
payable in respect of the issue or delivery of Warrant Stock (and Other
Securities) upon exercise of these Warrants.
2. RESERVATION OF SHARES AND OTHER SECURITIES. The Company will at all
times reserve for issuance and delivery upon exercise of these Warrants all
shares of Warrant Stock and other shares of capital stock of the Company (and
Other Securities) from time to time receivable upon exercise of these Warrants.
All such shares (and Other Securities) shall be duly authorized and, when issued
upon such exercise, shall be validly issued, fully paid and non-assessable and
free and clear of all preemptive rights.
3. FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issuable upon the exercise of these Warrants, but the
Company shall pay the Holder an amount equal to the fair market value of such
fractional share in lieu of each fraction of a share otherwise issuable upon any
exercise of these Warrants, as determined by the Board of Directors in its
reasonable discretion.
4. EXCHANGE OF WARRANTS. These Warrants are exchangeable, without
expense, at the option of the Holder, upon presentation and surrender hereofto
the Company or at the office of its stock transfer agent, if any, for other
Warrants of different denominations, entitling the Holder hereofto purchase in
the aggregate the same number of shares of Warrant Stock (and Other Securities)
purchasable hereunder.
5. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights as a shareholder of the Company, either at law or in
equity, and the rights of the Holderare limited to those expressed herein.
6. ANTI-DILUTION PROVISIONS.
6.1 ADJUSTMENT FOR RECAPITALIZATION. If the Company shall at any time
subdivide its outstanding shares of Common Stock (or Other Securities at the
time receivable upon the exercise of these Warrants) by recapitalization,
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reclassification or split-up thereof, or if the Company shall declare a stock
dividend or distribute shares of Common Stockto its shareholders, the number of
shares of Common Stock (or Other Securities) subject to these Warrants
immediately prior to such subdivision shall be proportionately increased and the
Exercise Price per share shall be proportionately decreased, and if the Company
shall at any time combine the outstanding shares of Common Stock (or Other
Securities) by recapitalization, reclassification or combination thereof, the
number of shares of Common Stock (or Other Securities) subject to these Warrants
immediately prior to such combination shall be proportionately decreased and the
Exercise Price per share shall be proportionately increased. Any such
adjustments pursuant to this Section 6.1 shall be effectve at the close of
business on the effective date of such subdivision or combination or, if any
adjustment is the result of a stock dividend or distribution, then the effective
date for such adjustment shall be the record date therefor.
6.2 ADJUSTMENT FOR REORGANIZATION. Consolidation. Merger. Etc. (a) In
case of any reorganization of the Company (or any other corporation, the
securities of which are at the time receivable upon the exercise of these
Warrants) after the date hereof or in case after such date the Company (or any
such other corporation) shall consolidate with or merge into another corporation
or convey all or substantially all of its assets to another corporation, then,
and in each such case, the Holder of these Warrants, upon the exercise hereof,
at any time after the consummation of such reorganization, consolidation, merger
or conveyance, shall be entitled to receive, in lieu of the securities and
property receivable upon the exercise of these Warrants prior to such
consummation, the securities or property to which such Holder would have been
entitled upon such consummation if such Holder had exercised these Warrants
immediately prior thereto (but had not exercised any rights with respect to such
securities or property in connection with the reorganization, consolidation,
merger or conveyance); in each such case, the terms of these Warrants shall be
applicable to the securities or property receivable upon the exercise of these
Warrants after such consummation.
(b) In any case where the Company shall consolidate with or merge into
another corporation, and shall not be the surviving corporation, or shall convey
all or substantially all of its assets to another corporation, then, and in each
such case, the surviving corporation or the corporation that shall have received
substantially all of the Company's assets shall expressly assume the obligations
of the Company under these Warrants in a form reasonably satisfactory to the
Holder hereof.
6.3 NO IMPAIRMENT. The Company will not, by amendment of its charter or
through reorganization, consolidation, merger, dissolution, issue or sale of
securities, sale of assets or any other voluntary action, avoid or seek to avoid
the
CONFIDENTIAL AND PROPRIETARY
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<PAGE>
observance or performance of any of the terms of these Warrants, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holderof these Warrants against impairment. Without limiting
the generality of the foregoing, while these Warrants are outstanding, the
Company (a) will not permit the par value, if any, of the shares of Warrant
Stock to be above the amount payable therefor upon such exercise and (b) will
take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue or sell fully paid and non-assessable
shares of Warrant Stock and Other Securities upon the exercise of these
Warrants.
6.4 CERTIFICATE AS TO ADJUSTMENTS. In each case of an adjustment in the
number of shares of Warrant Stock or Other Securities receivable upon the
exercise of these Warrants, the Company at its expense will promptly compute
such adjustment in accordance with the terms of these Warrants and prepare a
certificate executed by an executive officer of the Company setting forth such
adjustment and showing in detail the facts upon which such adjustment is based.
The Company will forthwith mail a copy of each such certificate to the Holder.
6.5 NOTICES OF RECORD DATE. Etc. In case:
(a) the Company shall take a record of the holders of its Common Stock
(or Other Securities at the time receivable upon the exercise of these Warrants)
for the purpose of entitling them to receive any dividend (other than a cash
dividend at the same rate as the rate of the last cash dividend theretofore
paid) or other distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities, or
to receive any other right; or
(b) of any capital reorganization of the Company, any reclassification
of the capital stock of the Company, any consolidation or merger of the Company
with or into another corporation, or any conveyance of all or substantially all
of the assets of the Company to another corporation; or
(c) of any voluntary or involuntary dissolution, liquidation or winding
up of the Company;
then, and in each such case, the Company shall mail or cause to be mailed to
each Holder of a Warrant at the time outstanding a notice specifying, as the
case may be, (i) the date on which a record is to be taken for the purpose of
such dividend, distribution or right, and stating the amount and character of
such dividend, distribution or right, or (ii) the date on which such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding up is to take place, and the time, if any,
to be fixed, as to which the
CONFIDENTIAL AND PROPRIETARY
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<PAGE>
holders of record of Warrant Stock (or such other securities at the time
receivable upon the exercise of these Warrants) shall be entitled to exchange
their shares of Warrant Stock (or such other securities) for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding up. Such notice shall be
mailed at least 20 days priorto the date therein specified and these Warrants
may be exercised priorto said date during the term of these Warrants.
8. RESTRICTIONS ON TRANSFER OF WARRANTS WARRANT STOCK AND OTHER
SECURITIES. The Warrant Stock and Other Securities may not be sold, transferred
or otherwise disposed of unless registered under the Securities Act of 1933 (the
"Securities Act") and any applicable state securities laws or pursuant to
available exemptions from such registration, provided that the seller delivers
to the Company an opinion of counsel satisfactory to the Company confirming the
availability of such exemption.
9. LEGEND. Unless the shares of Warrant Stock or Other Securities have
been registered under the Securities Act, upon exercise of any of these Warrants
and the issuance of any of the shares of Warrant Stock or Other Securities, all
certificates representing such securities shall bear on the face thereof
substantially the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "SECURITIES ACT") OR UNDER APPLICABLE STATE SECURITIES
LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AVAILABLE EXEMPTIONS FROM SUCH REGISTRATION,
PROVIDED THAT THE SELLER DELIVERS TO THE COMPANY AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY CONFIRMING THE AVAILABILITY OF SUCH
EXEMPTION. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR
THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF
TIME.
10. NOTICES. All notices required hereunder shall be in writing and
shall be deemed given when telegraphed, delivered personally or within two days
after mailing when mailed by certified or registered mail, return receipt
requested, to the Company at its principal office, or to the Holder at the
address set forth on the record books of the Company, or at such other address
of which the Company or the Holder has been advised by notice in writing
hereunder.
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<PAGE>
11. APPLICABLE LAW. These Warrants shall be governed by, and construed
in accordance with, the laws of the State of Delaware, without giving effect to
conflicts of law principles.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused these Warrants to be signed
on its behalf, in its corporate name, by its duly authorized officer, all as of
the day and year first above written.
SPORTSLINE USA, INC.
By:
--------------------------------
Titie: President
CONFIDENTIAL AND PROPRIETARY
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<PAGE>
WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to exercise Warrants to
purchase __________ shares of Common Stock of SportsLine USA, Inc., a Delaware
corporation, and hereby makes payment of $_______________ in full satisfaction
therefor.
__________________________________
Signature
__________________________________
Signature, if jointly held
__________________________________
Date
INSTRUCTIONS FOR ISSUANCE OF STOCK
(if other than to the Holder of the within Warrants)
Name____________________________________________________________________________
(Please typewrite or print in block letters)
Address_________________________________________________________________________
________________________________________________________________________________
Social Security or Taxpayer Identification Number_______________________________
CONFIDENTIAL AND PROPRIETARY
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<PAGE>
SportsLine USA, Inc.
6340 N.W. 5th Way
Fort Lauderdale, Florida 33309
Gentlemen:
This letter is being furnished in connection with the acquisition by
the undersigned of warrants ("Warrants") to purchase shares of common stock,
$.01 par value ("Comman Stock"), of SportsLine USA, Inc., a Delaware corporation
(the "Company"). In connection with the acquisition of the Warrants, the
undersigned hereby represents and warrants to the Company as follows:
1. The undersigned is acquiring the Warrants solely for the
undersigned's own accourt and not for the account or beneficial interest of any
other person, and the Warrants are not being acquired with a view to or for
resale in connection with any distrbution within the meaning of the Act.
2. The undersigned acknowledges that (a) the offer and sale of the
Warrants and the Common Stock issuable upon exercise of the Warrants
(collectively, the "Securities") have not been registered under the Securities
Act of 1933, as amended (the "Act"), or applicable state securities laws, and
may not be sold, transferred, pledged, or otherwise disposed of unless
subsequently so registered or unless the undersigned delivers to the Company an
opinion of counsel satisfactory to the Company that registration under the Act
and any applicable state securities laws is not required; (b) the Company is
under no obligation to register or perfect any exemption for resale of the
Securities; and (c) any certificate evidencing the Securities will bear a
restrictive legend prohibiting the transfer thereof except in compliance with
applicable federal and securities laws. The undersigned understands that at
present there is no market for the Securities and that such a market is not
likely to exist in the foreseeable future.
3. In acquiring the Securities, the undersigned has not acted on the
basis of any representations end warranties concerning the business or financial
condition of the Company, other then those contained in documents furnished to
the undersigned by the Company specifically in connection with such acquisition.
The undersigned is an "accredited investor", as defined in Rule 501 of
Regulation D promulgated under the Act, has such knowledge and experience in
business, financial and investment makers that the undersigned is capable of
evaluating the merits and risks of an investment in the Securities, and has been
afforded the opportunity to ask questions of, and receive answers from, the
Company and to obtain any additronai information necessary to verify the
accuracy of any information provided by the Company, and in general had access
to all information the undersigned deemed material to an investment decision
with respect to the acquisition of the Securities.
The undersigned acknowledges that the Company will rely on foregoing
representations and warranties and agrees to indemnify and hold harmless the
Company, its officers and directors and any controlling persons of the Company
from and against any and all loss, damage or liability arising out of any
misrepresentation contained herein. This letter shall be binding upon the
CONFIDENTIAL AND PROPRIETARY
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<PAGE>
undersigned's heirs, executors, administrators, legal representatives,
successors and assigns, and inure to the benefit of the Company's successors and
assigns.
Michael Jordan
_____________________
Dated:______________________________
CONFIDENTIAL AND PROPRIETARY
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<PAGE>
EXHIBIT "G"
<PAGE>
____________________, 1997
SPORTSLINE USA, INC.
6340 N.W. 5th Way
Fort Lauderdale, Florida 33309
ROBERTSON, STEPHENS & COMPANY LLC
COWEN & COMPANY
MONTGOMERY SECURITIES
as Representatives of the
Several Underwriters
c/o Robertson, Stephens & Company LLC
555 California Street
San Francisco, California 94104
Ladies and Gentlemen:
The undersigned understands that Robertson, Stephens & Company LLC,
Cowen & Company and Montgomery Securities, as representatives (the
"Representatives") of the several underwriters (the "Underwriters"), proposed to
enter into an Underwriting Agreement (the "Underwriting Agreement") with
SportsLine USA, Inc. (the "Company"), providing for the initial public offering
by the Underwriters, including the Representatives, of common stock, $.01 par
value per share (the "Common Stock"), of the Company (the "Public Offering").
In consideration of the Underwriters' agreement to purchase and
undertake the Public Offering and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the undersigned agrees that, without
the prior written consent of Robertson, Stephens & Company LLC, the undersigned
will not directly or indirectly offer, sell, solicit an offer to buy, make any
short sale, pledge, grant any option to purchase, contract to sell, or otherwise
dispose of or transfer any shares of Common Stock of the Company (including,
without limitation, shares of Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission) or any securities
convertible into or exercisable or exchangeable for such Common Stock (including
shares of Common Stock which may be issued upon exercise of a stock option or
warrant) or, in any manner, transfer all or a portion of the economic
consequences associated with the ownership of the Common Stock (including,
without limitation, by way of equity swap, hedging, or any other form of
derivative transaction) (any of the foregoing, a "Transfer"), or exercise any
registration rights with respect to the Common Stock, in each case for the
period
<PAGE>
_________________, 1997
Page 2
ending 180 days from the date the Registration Statement (No. 333-25259) filed
by the Company in connection with the Public Offering is declared effective by
the Securities and Exchange Commission; provided, however, that the undersigned
may Transfer, including any Transfer as a bona fide gift, any such securities to
any person who, at or prior to the time of such Transfer, has executed and
delivered to the Representatives a letter agreement in the form hereof.
In addition, the undersigned agrees that the Company may, with respect
to any shares for which the undersigned is the record or beneficial holder,
cause the transfer agent for the Company to note stop transfer instructions with
respect to such shares on the transfer books and records of the Company.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this letter agreement, and that, upon
request, the undersigned will execute any additional documents necessary or
desirable in connection with the enforcement hereof. All authority herein
conferred or agreed to be conferred shall survive the death or incapacity of the
undersigned and all obligations of the undersigned created hereunder shall be
binding upon the heirs, personal representatives, successors, and assigns of the
undersigned. This letter agreement shall automatically terminate on the earlier
of (i) August 1, 1997, in the event that the Underwriting Agreement is not
executed by the Company or on prior to that date and (ii) the date that the
Underwriting Agreement is terminated, in the event that the Underwriters do not
purchase the Common Stock and the Underwriting Agreement is terminated pursuant
to its terms.
Very truly yours,
Dated:______________________ _________________________________
Name of Holder
_________________________________
Signature
Dated:______________________ _________________________________
Name of Joint Holder
_________________________________
Signature